Notice of Assessment vs Notice of Reassessment: Understanding Key CRA Notices

Introduction

Every Canadian taxpayer receives a Notice of Assessment (NOA) after filing their tax return — but far fewer understand what it actually means. Even more confusion occurs when CRA later issues a Notice of Reassessment (NOR), often adjusting your return, adding tax owing, denying deductions, or applying penalties. Understanding these two documents is critical for responding correctly, protecting your rights, avoiding penalties, and knowing when to file an objection. This guide explains the difference between an Assessment and a Reassessment, why CRA issues these notices, and how to respond strategically.

What Is a Notice of Assessment?

A Notice of Assessment is CRA’s initial review of your tax return. It confirms:
taxable income
tax credits
refunds or balance owing
GST/HST credit eligibility
CCB eligibility (if applicable)
The NOA means CRA has processed your return — it does NOT mean CRA has audited it or that it agrees with all claims.

When CRA Issues a Notice of Assessment

CRA sends an NOA after:
you file a tax return
CRA processes slip information
automated system checks for errors
The NOA includes:
summary of income
summary of deductions
refund or amount owing
RRSP contribution limits
carryforward amounts
This is the “official record” of your filed tax year.

What Is a Notice of Reassessment?

A Notice of Reassessment is CRA’s correction, adjustment, or challenge to your originally assessed tax return. A NOR is usually issued when CRA:
finds missing income
finds errors in deductions
issues corrections after a review
conducts an audit
identifies mismatched slips
finds GST/HST or payroll discrepancies
A reassessment overrides your original assessment and becomes CRA’s new official version of your tax year.

Why CRA Issues a Notice of Reassessment

CRA reassesses for many reasons:
missing T4, T5, T3 slips
underreported business income
crypto income omissions
incorrect rental expenses
improper capital gains calculations
vehicle or home office claims lacking documentation
real estate flip or assignment reclassification
GST/HST errors
foreign income mismatches
CRA rarelу reassesses randomly — there is always a reason.

Types of Reassessments

1. Automated Slip-Matching Reassessment

Occurs when CRA receives data from employers/banks that you did not include.

2. Review-Based Reassessment

CRA conducts a Processing Review or Pre-Assessment Review.

3. Audit Reassessment

After a full audit of income, GST/HST, payroll, real estate, crypto, or corporate records.

4. Request-Based Reassessment

When the taxpayer files an adjustment (T1-ADJ).

5. Arbitrary Assessment

Issued when the taxpayer fails to file — CRA estimates income.

What a Reassessment Letter Includes

CRA outlines:
what changed
why it changed
the additional tax owing
penalties applied
interest applied
your 90-day Objection deadline
Reading the NOR carefully is critical — most taxpayers skip key details.

Common Reasons CRA Reassesses

missing slips
duplicate deductions
non-deductible expenses
incorrect CCA
foreign income not reported
rental income understated
T1135 foreign asset errors
crypto ACB errors
GST/HST ITCs denied
capital gains reclassified
real estate profit treated as business income
vehicle claims without mileage logs
CRA reassessments often involve multiple tax years.

Consequences of a Reassessment

CRA may add:
tax owing
daily compounding interest
late-filing penalties
late-payment penalties
gross negligence penalties
GST/HST arrears
reassessments can ruin cash flow, freeze accounts, or trigger collections.

What to Do After Receiving a Reassessment

1. Do NOT ignore it

Reassessments become final if not disputed.

2. Identify the audit issue

Review what CRA adjusted.

3. Gather evidence

Receipts, bank statements, logs, contracts, crypto logs, rental statements.

4. Contact a CPA immediately

A professional must analyze the reassessment.

5. File a Notice of Objection within 90 days

This protects your right to dispute the reassessment.

When Collections Are Paused

Filing an Objection stops income-tax collections, meaning CRA cannot:
freeze your bank
garnish wages
seize refunds
However, Objections do NOT stop GST/HST or payroll collections.

When a Reassessment Is Wrong

CRA assumptions often cause incorrect reassessments:
misread bank deposits
denied legitimate expenses
incorrect crypto ACB
misinterpreted rental records
incorrect business classification
With evidence and legal argumentation, many reassessments are overturned at Appeals.

When the Reassessment Is Correct

Even when the tax owing is correct, you may still:
apply for Taxpayer Relief
negotiate payment arrangements
request interest cancellation
CRA often reduces interest in hardship cases.

Statute Limitation Rules for Reassessments

CRA has:
three years to reassess individuals
three years for CCPCs
four years for large corporations
Exceptions: misrepresentation or fraud — reassessment period becomes unlimited.

Mackisen Strategy

At Mackisen CPA Montreal, we analyze your Notice of Assessment or Reassessment, identify CRA errors, prepare evidence-based rebuttals, file Notices of Objection, negotiate payment arrangements, and defend your tax position through CRA Appeals or Tax Court. We ensure CRA applies the law fairly — not assumptions.

Real Client Experience

A Montreal engineer reversed a reassessment caused by a missing T5 slip. A landlord successfully challenged rental expense denials. A contractor overturned a GST/HST reassessment through ITC reconstruction. A crypto investor reduced a six-figure reassessment after correcting ACB calculations.

Common Questions

Is a Notice of Assessment final? Yes — unless you request adjustments. Is a Reassessment serious? Yes — act immediately. Can I dispute a Reassessment? Yes — through Objection. Will CRA freeze my account? If tax becomes payable and unaddressed. Can old years be reassessed? Yes — if CRA alleges misrepresentation.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps taxpayers understand CRA assessments, dispute incorrect reassessments, and protect their financial rights through expert representation and strong documentation.